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The definition and elements of an economic history

Ancient Greece[ edit ] Hesiod active 750 to 650 BC, a Boeotian who wrote the earliest known work concerning the basic origins of economic thought, contemporary with Homer. Ancient Athensan advanced city-state civilisation and progressive society, developed an embryonic model of democracy.

  1. The production—possibility frontier PPF is an expository figure for representing scarcity, cost, and efficiency. All determinants are predominantly taken as constant factors of demand and supply.
  2. Whilst human laws might not impose sanctions for unfair dealing, divine law did, in his opinion. Their usage rates can be changed easily, such as electrical power, raw-material inputs, and over-time and temp work.
  3. Recognizing the reality of scarcity and then figuring out how to organize society for the most efficient use of resources has been described as the "essence of economics", where the subject "makes its unique contribution.
  4. A measure of gains from trade is the increased income levels that trade may facilitate. Among each of these production systems, there may be a corresponding division of labour with different work groups specializing, or correspondingly different types of capital equipment and differentiated land uses.
  5. Markets Economists study trade, production and consumption decisions, such as those that occur in a traditional marketplace. These are represented in theoretical and empirical forms as in the neoclassical and endogenous growth models and in growth accounting.

Plato 's dialogue The Republic c. According to Joseph SchumpeterPlato was the first known advocate of a credit theory of money that is, money as a unit of account for debt. Of particular interest for economists, Plato provided a blueprint of a society based on common ownership of resources. Aristotle viewed this model as an oligarchical anathema. Though Aristotle did certainly advocate holding many things in common, he argued that not everything could be, simply because of the "wickedness of human nature".

For him there is a certain "art of acquisition" or "wealth-getting", but because it[ clarification needed ] is the same many people are obsessed with its accumulation, and "wealth-getting" for one's household is "necessary and honorable", while exchange on the retail trade for simple accumulation is "justly censured, for it is dishonorable".

History of economic thought

Thomas Aquinas[ edit ] Thomas Aquinas 1225—1274 was an Italian theologian and economic writer. He taught in both Cologne and Parisand was part of a group of Catholic scholars known as the Schoolmenwho moved their enquiries beyond theology to philosophical and scientific debates. In the treatise Summa Theologica Aquinas dealt with the concept of a just pricewhich he considered necessary for the reproduction of the social order.

Similar in many ways to the modern concept of long run equilibriuma just price was just sufficient to cover the costs of productionincluding the maintenance of a worker and his family. Aquinas argued it was immoral for sellers to raise their prices simply because buyers had a pressing need for a product. Aquinas discusses a number of topics in the format of questions and replies, substantial tracts dealing with Aristotle's theory.

Questions 77 and 78 concern economic issues, primarily what a just price might be, and the fairness of a seller dispensing faulty goods. Aquinas argued against any form of cheating and recommended always paying compensation in lieu of good service[ clarification needed ].

  1. If people did not benefit from a transaction, in Scotus' view, they would not trade. Externalities occur where there are significant social costs or benefits from production or consumption that are not reflected in market prices.
  2. Much environmental economics concerns externalities or " public bads ".
  3. Even if one region has an absolute advantage as to the ratio of its outputs to inputs in every type of output, it may still specialize in the output in which it has a comparative advantage and thereby gain from trading with a region that lacks any absolute advantage but has a comparative advantage in producing something else. In the simplest case an economy can produce just two goods say "guns" and "butter".

Whilst human laws might not impose sanctions for unfair dealing, divine law did, in his opinion. In his work Sententiae 1295he thought it possible to be more precise than Aquinas in calculating a just price, emphasizing the costs of labor and expenses, although he recognized that the latter might be inflated by exaggeration because buyer and seller usually have different ideas of a just price.

If people did not benefit from a transaction, in Scotus' view, they would not trade.

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Scotus said merchants perform a necessary and useful social role by transporting goods and making them available to the public. Buridanus looked at money from two angles: He argued that aggregated, not individual, demand and supply determine market prices. Hence, for him a just price was what the society collectively and not just one individual is willing to pay.